Monday, April 20, 2009

Advances

An advance is a statement by a publisher that they anticipate selling a certain number of copies of your book. Only a few epublishers offer modest advances. Samhain offers the option of a $100 advance, which mist authors could anticipate making back within a month. Lyrical offers the same amount of longer fiction for their three new imprints. Now it is rumored that the Wild Rose Press will offer a small advance for their White Rose imprint only. Do writers of Christian romance need the advance more, or deserve it?

In the end, an advance is just one piece of information you use to try and determine what your publisher will invest in you, how your book might sell. But with epublishers the first royalties start arriving quickly and regularly--and there are other ways of working out how your sales will go. On the whole I think the emphasis on paying an advance is the trapping and suits of print publishing--it has very little relevance to the epublishing model.

I don't see advances as being necessary in Epublishing because royalties are paid more expediently.

Lynn Viehl recently posted her statement online, along with the breakdown of what she earned (apprx 26K) and what she received ($0) because she did receive an advance. And that was after waiting more than six months for the biannual reporting.

So, I think it's more important for an author to decide if they feel the "prestige" of an advance in Epublishing is a sound enough reason to consider a publisher or not.

If a publisher offered one to me, I'd option out of an advance. But that's my opinion. YMMV.

Just to play devil's advocate, it's possible that the lack (or minimal nature) of advances in the epub world is merely reflective of the relatively small numbers, rather than an intrinsic change in the business model.

If the average first-year earn-out is only about a grand or two per title, the issue of receiving that money as an advance versus receiving the same money as royalties isn't a big deal. Think of it as interest -- what's the interest on a thousand dollars for a year? Twenty bucks?

OTOH, assuming epubs catch up in volume to the NY publishers, and the mid-list epubbed books are selling 50K copies each, and much of it in the first month, then the dollar amounts become bigger, and the cost (to the author) of delays also rises.

In the NY publishing world, the advance is, ideally, an indication of how much the publisher thinks the book will earn out, and that becomes a self-fulfilling prophecy, especially at the higher end, where high advances lead to additional expenses in marketing the book, and low advances mean the book is left to flounder on its own.

So, assuming the numbers grow in epublishing to match the numbers in NY publishing, and a publisher decides a given book is going to sell 20K copies, with royalties at the current epub rates, which would mean about $2 a copy, then the earn-out would be $40K, and that's the maximum advance the publisher would offer.

Financially speaking, an author will be better off receiving that $40K up front -- now, rather than later. Again, think of the interest on that kind of money. Even a couple months' delay is a financial loss for the author, compared to having the money now.

Plus, once the publisher has put that kind of money into the book, there's more of an incentive for the publisher to do what it can to market the book and give it the best possible chance to earn out.

Yes, with an advance, there's pressure on the author to earn out, which is stressful, but that same pressure is also applied to the publisher, which is a good thing. In the current epub model -- no advance and relatively small hard costs in producing the book -- there's comparatively little investment by the publisher in each book, which can (possibly, not saying it has in any given instance) lead to epubs acting as author mills, where they're just throwing every possible book onto the shelf to see if they sell, essentially expecting to earn only a micro-profit from each book, adding up to enough to stay in business, but none of the authors, individually, is earning a living wage.

"Lynn Viehl recently posted her statement online, along with the breakdown of what she earned (apprx 26K) and what she received ($0) because she did receive an advance. "

--This makes no sense, unless the author accepted an advance _instead_ of royalties. (which would be beyond stupid). As long as her advance was less than what her book had earned out, she'd have been entitled to royalties.

Ravenous Romance gives $200 advances for +all+ its contracted novels and novelists, guaranteed. I don't think Dreamspinner does that for everyone, (only for certain authors who have sold well for them in the past.)

The average ebook sells about 500 copies for its whole in-print lifetime. Anybody who does better than that is at the tip-top of the sales spectrum. And even a small advance for ebooks motivates the publisher to do more to promote and ensure their books earn out.

It makes sense to me--you do get an advance instead of royalties. It is an advance *on* royalties, so you only get further royalties once the advance is earned out. As large print presses tend to give an advance equal to the royalties they expect the book to make, often the advance will be all the author makes in total.

Guess I'll pipe up here to say NRP offers an advance up to $1000. Of course, we haven't paid that out yet; the highest we've offered is $300. The option is on the table, though, for the right book by the right author.

We started offering an advance because we were a new company, entering a slightly volatile industry (at the time, a lot of pubs were closing under dubious circumstances). We wanted to show we supported our authors, and we were here for the duration. Kind of offset the risk an author might think they were taking by going with a new publisher.

"Lynn Viehl recently posted her statement online, along with the breakdown of what she earned (apprx 26K) and what she received ($0) because she did receive an advance. "

--This makes no sense, unless the author accepted an advance _instead_ of royalties. (which would be beyond stupid). As long as her advance was less than what her book had earned out, she'd have been entitled to royalties.Her advance was 50,000 dollars. Her 26k royalties only partially paid out her advance on that first royalty statement, so she gets no money yet. She already got 50k. When she makes more than 50k in royalties, which she's sure to do having made more than half her advance in a single pay period, then she'll start getting any royalties above the 50k she was already paid.

I'm surprised someone who acts so knowledgeable about the business doesn't know how advances work.

The average ebook sells about 500 copies for its whole in-print lifetime. Anybody who does better than that is at the tip-top of the sales spectrum. And even a small advance for ebooks motivates the publisher to do more to promote and ensure their books earn out.Where are you getting those figures? The average ebook, spread out over *all* the presses, earns far less than that over its lifetime. However, an ebook at the top presses like EC and Samhain and even Loose ID, sell far more than 500 copies in its lifetime. My EC books sold around three times that in their first month. I'm hardly a heavy hitter in the epublishing business either. I know plenty of Samhain authors who regularly sell well more than 500 in their first months as well.

Now a small, lower-end pub can certainly expect to sell far less, and many places, like Wild Rose Press and Freya's Bower sell only in double digits each month, if that.

I know how advances work, Anon 9:16. I'm a published author who gets advances and royalties myself.

First of all who on earth pays a $50,000 advance on an ebook? Or if this example was for a print book (I suspect it was) why was the comparison made here?

Second, if her book has earned only $26K when her advance was $50K, then no, Lynn would _not_ be entitled to royalties. At least, not yet. If her book continues to sell she could very well be entitled to royalties later on.

Explain to me again why this is bad? If she hadn't accepted an advance, she'd only have _half_ the money she's already been paid so far. Though if her book doesn't earn out, she might have a hard time getting another deal. But 50K in one lump sum beats the hell out of $25K in drips and draps. Again, you aren't making any sense.

Anon @3:14 - Explain to me again why this is bad? If she hadn't accepted an advance, she'd only have _half_ the money she's already been paid so far. Though if her book doesn't earn out, she might have a hard time getting another deal. But 50K in one lump sum beats the hell out of $25K in drips and draps. Again, you aren't making any sense.I never said it was bad. I was responding to Anon 7:23 which I am assuming is *you*. Because you were the one seeming confused as to why someone who got a 50k advance didn't get any royalties yet. I mean, you said "--This makes no sense, unless the author accepted an advance _instead_ of royalties. (which would be beyond stupid). As long as her advance was less than what her book had earned out, she'd have been entitled to royalties."

If you know how advances work, then why are you confused as to why a writer who got a 50k advance hasn't seen any royalties yet when her royalties so far have been only 26k? You're the one not making sense here.

also, Anon, an advance is an advance "on" royalties. It's not "instead" of royalties. If the book earns out its advance (many do) there will be more $$.Which is...exactly what I said, thanks for regurgitating it like I hadn't already said the exact same thing. o_O

To be honest, I think both Anons have missed the point of Lynn's post. She was indicating that even if you get an advance, you don't get to keep all the money. It wasn't that she'd only sold 26K worth of books, it was that "After expenses and everyone else was paid, I netted about $26K of my $50K advance for this book,"

The average ebook sells about 500 copies for its whole in-print lifetime. Anybody who does better than that is at the tip-top of the sales spectrum.

Hey, speaking for Loose Id -- 500 copies in the lifetime of a book would be expected, not stunning news. Looking at the stats from ERECsite and Show Me the Money, EC, Loose Id, Samhain and many other epublishers have authors who do so regularly.